Closing the gap between volume and catalogue distribution

Paul Boughton

Rutronik24 gives smaller and medium-sized customers access to the advantages of volume distribution. Thomas Rudel reports

Roughly 40 per cent of customers in the European electronics market are currently supplied inadequately: They are either too small for volume distribution or too large for catalogue distribution. It takes a great deal of time and effort, as well as numerous sources, to satisfy their demand for components. Rutronik24, the new sales organisation of the broadliner Rutronik, closes this gap and ensures efficient procurement for traditional distribution customers.

In today’s distribution landscape, around 40 per cent of the overall market is supplied through volume distributors. Catalogue distributors supply smaller customers with smaller quantities and samples, accounting for roughly 10 per cent of the total market. This leaves a gap of about 40 per cent - ie customers that are too small for volume distribution, yet too large to be served by catalogue distributors. This predominantly applies to medium-sized businesses and smaller assembly companies.

These were the typical distribution customers roughly 20 years ago. At that time, component producers supplied several thousand larger customers themselves, while catalogue distributors were responsible for small volume business; everything else in between was handled by a number of franchise distributors. However, by placing greater emphasis on their core competences – product development – manufacturers have gradually moved away from direct sales and today focus their attention on maybe just one hundred very large customers. This has resulted in a new set of customers for volume distributors and a turnover of several million euros, as well as greater volume requirements. Due to the prevailing competitive conditions, also influenced by Europeanisation and globalisation, their strategy was ultimately to encourage growth and to sell greater quantities of goods. As this was the only way to survive in the market while meeting the demands of their franchise manufacturers. Therefore, less and less franchise distributors served ever larger customers.  

A large number of companies that were too small for volume distribution and too large for catalogue distribution were left by the wayside. In Austria, in particular, there are many development companies with a reasonable turnover which do not require a large number of parts and are thus considered too small for large-scale distribution. Even smaller OEMs or manufacturers, eg in the aircraft or medical industry, which do not produce large amounts of parts encounter supply problems. They currently purchase components from niche and small distributors or brokers. They definitely have a role to play and are uniquely tailored to meet specific requirements. Nonetheless, there are a number of disadvantages for the broad range of customers which they currently work with: Customers are not usually able to purchase all they need from a single provider, but must obtain the necessary components from various sources. In this case, it is not possible to determine whether the selected components are preferred products or not. There is always the risk of obtaining non-standard parts which are only available for a short period of time. Customers also find it difficult to rely on product quality, as the supply chain, in contrast to traditional volume distribution, is often not fully traceable.

Closing the supply gap

Rutronik is able to close this gap through its new sales organization Rutronik24. At the core of the concept is the e-commerce platform www.rutronik24.com. Customers who previously stayed below the turnover threshold of Rutronik can now access the broadliner’s entire product portfolio and manage their procurement processes more efficiently. The product catalogue has been enhanced with numerous tools to facilitate ordering, and includes the Rutronik delivery service and logistics.

The online catalogue provides access to over one million items covering the entire range of electronic components. Rutronik does not simply focus on a specific product area, but offers customers passive and electro-mechanical components, semiconductors, storage technologies, displays and boards, as well as wireless products. The broadliner is therefore adapting to the current trend of reducing the number of supply sources. All the components originate from Rutronik franchise partners, thus ensuring that Rutronik24 is very competitive in terms of price and all the products meet the high Rutronik quality standards. There is also no minimum order value; the smallest order quantity is a packaging unit. Furthermore, customers can order samples and request special offers.

Intelligent search functions
 
Intelligent search functions to search for technical parameters, part numbers or full text ensure that customers find the required components quickly. Current prices and information on availability are shown in real time after selecting products. Several selected products can be compared; the parameters which differentiate them from each other are highlighted red. Proposed alternative spare products with a detailed list of the individually differing parameters help, eg, with discontinued parts and when searching for more favourably priced or readily available components. If no adequate replacement can be found, the customer can revert to the classic Rutronik system and receive alternative proposals from the relevant experts.

A so-called star system indicates whether the article is a high runner, a preferred article or a demand-driven article. Further information, eg, on the standard delivery lead time or the supplier data sheet are available via a link. PCNs are linked directly to the respective product to ensure they appear with it at every position. They are additionally stored in a full PCN database.  

Evaluation of individual part lists

The platform provides a very special tool to compare individual part lists with the Rutronik24 range: Rutronik24 customers can use the mass quotation to simply upload their entire, individual part list. The e-commerce platform provides the respective Rutronik article numbers immediately together with the current prices, delivery lead times and packaging units. Customers can use this hit list to place orders item by item. Changes to the customer list are not necessary in order to utilize mass quotation, as it must only contain the supplier part number and details of the desired quantity. Processible formats are xls, xlsx and csv.

The opportunity to order goods to a fixed date is particularly interesting for smaller and medium-sized companies and OEMs. Moreover, there is a choice of standard shipping, which takes the individually agreed terms of delivery into account, and express shipping via DHL Express. There are no additional delivery costs for orders over €100 to most EU countries. It is possible to pay by credit card or invoice. After placing an order, customers are immediately informed of the binding delivery date and the shipping costs according to the selected shipping option. Customers can track the ordered goods online in real-time. If necessary, the Rutronik product consultant provides expert advice on all aspects of component selection and personal product specialists can be contacted directly via Rutronik24.  

In the Procurement section, customers are provided with a full overview of their orders, contracts, articles, store inventories, etc. with the respective order number, status, desired date, delivery date and real-time tracking. Within the Online Community TechForum, engineers, developers and purchasers can exchange ideas with Rutronik experts and each other irrespective of where they may be in the world. It is moderated by Rutronik product specialists, who also pass on their wealth of know-how and extensive experience.

But not only customers profit from Rutronik24. Rutronik24 also proves to be a useful path to new customers for Rutronik franchise partners. And in contrast to catalog distribution, this sales channel even ensures full traceability of small quantities or samples and registration of the respective projects.   

Rutronik24 can be accessed from anywhere in the world. The e-commerce platform is currently available in German, English, French, Spanish, Italian and Chinese. Optimized versions can also be used on tablet PCs and smartphones. In Germany, a team of 30 field and office staff are dedicated to helping Rutronik24 customers. They present the Rutronik24 range and the e-commerce platform to new customers, and existing customers benefit from support and advice face-to-face or over the phone.

Accompanying growth

If Rutronik24 customers grow, they profit, in particular, from the services of the classic Rutronik system, such as technical and economic support or logistics solutions. There are no clearly defined thresholds as each allocation is being carried out individually for each customer on the basis of various parameters. However, this should not be seen as classifying customers as first or second class. In truth, the distributor caters for the various customers with adequate, tailored concepts. And thus also aims to achieve the goal of sustainable growth.

Thomas Rudel is CEO of Rutronik Elektronische Bauelemente GmbH. For more information, visit www.rutronik.com